By Mark Casciari, Ben Conley and James Napoli

In its third lawsuit in as many months, the EEOC requested a temporary restraining order against the Honeywell International Inc. wellness program.  The EEOC alleged that the program violates the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).  Honeywell’s wellness program appears to fall squarely within the legal parameters of HIPAA (as amended by the Affordable Care Act), the ADA and arguably GINA (and Honeywell has released a statement to this effect).  All three actions are commenced by the Chicago office of the EEOC.  This alert focuses on the Honeywell case; for a discussion of the two cases see our earlier blog post.

The EEOC alleges that Honeywell’s wellness program violates the ADA because the penalties for failure to participate render the program “involuntary.”  The EEOC alleges that the penalties could amount to $4,000 annually (depending on whether the individual has enrolled in self-only or family coverage).[1]  The EEOC alleges that half of this amount is a smoker surcharge (HIPAA “health-contingent” wellness), and the remainder results from failure to participate in the biometric screening (HIPAA “participation-only” wellness).

The EEOC also alleges that Honeywell’s wellness program violates GINA, because it offers employees an incentive to provide family medical history in connection with a wellness program.  According to the EEOC, Honeywell contributes to employee health savings accounts (HSAs) if the employee and his/her spouse go through the biometric screening, but it imposes a $1,000 surcharge if they do not.  Under GINA, genetic information includes information relating to a manifestation of a disease or disorder in family members.  The statute defines “family member” to include spouses, even though spouses are not genetically related.

On November 3, 2014, the district judge denied the EEOC’s request for a temporary restraining order.  The case now reverts back to the administrative charging process pursuant to which the EEOC will investigate the alleged unlawful practices and attempt to conciliate the matter.

The court action taken by the EEOC raises a number of issues that may be resolved during the administrative process or in subsequent litigation.  Some of the more pertinent issues raised in the EEOC v. Honeywell case include:

1.  It appears that the program falls squarely within the parameters of the HIPAA nondiscrimination requirements (as amended by the Affordable Care Act).

Question Presented:  Is HIPAA compliance a safe harbor from ADA litigation?

2.  As noted in our earlier post, the ADA contains a safe harbor for wellness programs that are part of a bona fide benefit plan.  The Court of Appeals for the Eleventh Circuit, in Seff v. Broward County, 691 F.3d 1221 (11th Cir. 2012), relied on the ADA safe harbor to uphold a “participation-only” wellness program.  The EEOC now argues that ’s memorandum of law argues the Seff decision was misguided and inconsistent with the legislative history and purpose of the safe harbor provision.

Question Presented:  Does the ADA benefit plan safe harbor have the meaning afforded to it by the Eleventh Circuit?

3.   The EEOC has staked out a hyper-overly technical stance on GINA that goes far beyond the abuses GINA was intended to guard against.  No genetic information (in the literal sense) can be gleaned from combining the medical information of an employee and his or her spouse (i.e., the combined medical information does not equate to “family medical history”).  Moreover, the employer in this instance does not have access to the specific medical information being collected under the wellness program.

Question Presented:  Can GINA be used to undermine HIPAA-compliant wellness programs?

4.  The EEOC’s actions in this case fall outside of its regulatory mandate.  Guidance is to be issued by the Congressionally confirmed Commissioners and not from an EEOC litigator in a field office.  If the EEOC continues down this path, employers will be left with a patchwork of case law that will not guarantee a uniform system of rules and regulations as is envisioned under the EEOC’s charter and required with respect to all benefit programs.

We will continue to monitor developments in EEOC v. Honeywell as well as the fallout caused by the case that is already beginning to be felt in the nation’s capital.

---